WASHINGTON, Sept 19 Republicans in the U.S.
House of Representatives on Thursday plowed ahead with a bill to
gut President Barack Obama's healthcare law while temporarily
funding other government programs, ignoring a warning from the
White House that the measure would be vetoed.

The bill, which would keep the government running through
Dec. 15 and avert shutdowns with the start of the new fiscal
year on Oct. 1, faced its first test vote in the House on
Thursday with passage of the measure expected on Friday.

"We'll deliver a big victory in the House tomorrow," a
confident House Speaker John Boehner told reporters.

The administration wasted no time in formally announcing
that it would not allow rebellious House Republicans to destroy
the "Obamacare" healthcare law by denying funds.

In a terse statement, the White House said the House bill
would be vetoed "because it advances a narrow ideological agenda
that threatens our economy and the interests of the middle
class." The statement went on to say that "millions of
hard-working middle class families" would be denied affordable
health coverage.

This is the latest round in a series of battles Obama faces
with Congress over the next few months in what has become an
unending standoff over running Washington's most basic
operations, from the FBI and national parks to education and
military programs.

And the Dec. 15 cut-off date for the funding measure
guarantees yet another struggle around Christmas time.

Besides the spending bill, Congress and the White House have
to either agree in October or early November on a measure to
increase U.S. borrowing authority or plunge the nation into a
first-ever credit default.

In 2011, as Republicans and Democrats fought over these two
same issues, U.S. financial markets swooned because of all the
uncertainty created by Washington's inability to work together.

Between July 7 and Aug. 9 of that year, the Dow Jones
Industrial Average blue-chip stocks plummeted 2,150 points, or
16.9 percent.

'STEALTH DEBT LIMIT' HIKE

The Republican bill is expected to attract no Democratic
support and even some conservative opposition.

For example, Republican Representative Thomas Massie of
Kentucky told Reuters that he planned to vote against the
measure because "it's a stealth debt limit increase."

Massie was referring to a provision of the bill that would
instruct the Treasury Department to pay bondholders and Social
Security retirement benefits even if Congress fails to increase
the government's $16.7 trillion borrowing cap that will soon be
breached.

Assuming the House passes the Republican-backed bill to
defund Obamacare and provide temporary government funds, it will
be significantly altered by the Democratic Senate next week.

Democrats in that chamber plan to delete the House's
Obamacare provision and send the temporary spending bill back to
the House for passage before the Sept. 30 deadline when the
current fiscal year ends.

Senate Democrats believe that more than a dozen Republicans
in that chamber could back them since they are on record
opposing linking Obamacare to keeping the government open. Some
of those Republicans have described their House colleagues' ploy
as "foolish," a "silly effort" and "the dumbest idea I've ever
heard."

If the Senate kills the Obamacare defunding proposal and
sends the House a basic temporary spending bill, Boehner and
House Democratic leader Nancy Pelosi will then each face
difficult decisions.

Since many House Republicans are expected to vote against
final passage of the stripped-down measure, Boehner might have
to decide whether to rely on significant Democratic support to
win passage, a politically difficult move.

For Pelosi, the question will be whether to throw her weight
behind a bill that continues deep, across-the-board spending
cuts that Democrats want to end.

Many inside and outside of Congress are guessing that both
leaders will hold their noses, keeping in mind that the
alternative, an Oct. 1 government shutdown, is not an option.

Next In Bonds News

FRANKFURT/LONDON, Dec 9 The European Central
Bank hopes its decision to confront struggling Italian bank
Monte dei Paschi at last will draw a line under a multi-year
crisis that has risked tarnishing its reputation as a credible
supervisor.

Dec 9 A former Cantor Fitzgerald & Co trader has
been indicted on charges that he defrauded investors by lying
about the price of mortgage bond transactions he handled for
them after the financial crisis in order to illegally profit.

TORONTO, Dec 9 Cash-strapped Centerra Gold Inc
said on Friday that it will suspend its third-quarter
and future dividends, citing financial restrictions by
Kyrgyzstan on its key subsidiary, Kumtor Gold Co.

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